First Union: Offices Sold Securities Unlawfully

TAMPA - — First Union Corp. said it sold securities at branches in Florida without the proper permits, and it plans to reimburse customers who lost money on those investments.

The nation's sixth-biggest bank has been the target of a lawsuit in Florida about its securities sales practices since August. Although the lawsuit's accusations included that of sales from unlicensed branches, First Union confirmed it through its internal investigation in March, spokesman Jeep Bryant said.

The company plans to offer to cover the losses of customers if they made investments through the 138 offices that lacked proper licenses. "Less than 15 percent" of the 4,300 customers who invested through those branches have losses, totaling less than $1 million, Bryant said.

First Union, based in Charlotte, N.C., filed on Friday in U.S. District Court in Tampa for permission to go ahead with the reimbursement offer.

The bank's admission only covers one of the issues in the lawsuit, said Jonathan Alpert, an attorney for the plaintiffs. "I'm delighted they have 'fessed up as much as they have, but there's a lot more 'fessing up to do," he said.

The lawsuit, filed in August, also accuses First Union of misleading some customers about the nature of their investments and failing to make clear that they're not insured, as are traditional bank products.